Last night the Treasury made clear that any large increase in the budget were “not acceptable” given that member states were trying to cut spending.

A spokesman said: “The UK has made its position on the European Union’s seven-year budget clear: as with the annual budget, large increases are not acceptable when countries around Europe are facing tough decisions on domestic spending.”

European Union officials attempted to defend the increase, pointing out that the Commission is only asking for a three per cent increase in its spending “ceiling”.

They say that the increase in the spending ceiling is far lower – 3.2 per cent to Eur1025billion at 2011 prices – and is never reached by the Commission.

The money is spent on everything from cross-border motorways and broadband networks to the Northern Ireland peace process and development aid.

One official said: “We believe that it is ambitious and realistic. The terms of the debate are changing. We will have more detailed debate towards the end of the year.”